City mansions and luxury cars - how the Obeids spent their coal money

PALATIAL homes and luxury cars were the spoils of the Obeids' $30 million pay day from a corrupt coal deal, hidden through a tangled web of family loans and trusts, ICAC heard yesterday.

The corruption watchdog was also told the Obeids would pay just over $5 million tax on the windfall sale of Mt Penny mining tenement, now at the centre of the inquiry.

Bank statements revealed $1.5 million landed in the loan accounts of former Labor powerbroker Eddie Obeid and his wife Judith - despite him declaring to parliament his only income was his $130,000 upper house salary.

Details of their complex finances were laid bare during evidence from the family's accountant, Sid Sassine, while ICAC's accountant said he "followed the money trail" to trace five lucrative Obeid payments that came from the mining profits.

Today will be the final day of the investigation into accusations former resources minister Ian Macdonald rorted the tender process on coal mining licences in the Bylong Valley for the potential $100 million benefit of the Obeid family.

It was announced yesterday that crucial witness John Gerathy, Mr Macdonald's business partner and the man ICAC alleges paid him $450,000 to tide him over before he could receive a cut of the corrupt coal deal, would not give evidence.

Assisting counsel Geoffrey Watson SC said four medical reports indicated Mr Gerathy "has health problems which have manifested in a mental illness" and his evidence couldn't be relied upon.

ICAC investigators seized a damning note from Mr Gerathy's office last October which allegedly linked Mr Macdonald to a share of the profits from the Cascade Coal sale.

The Obeid family paid no more than $300,000 for a farm "smack bang on top of a new mining tenement" and, two years later, received $30 million through the sale of their stake in Cascade Coal.

Mr Sassine told the inquiry that of that profit, which flowed into family company South East Investment Group Pty Ltd and then into a family trust, "$4.6 million (so far) has gone to the taxman". He added a further $1.2 million would be paid in the next financial year.

That is a tax rate of just under 20 per cent - compared with the corporate rate of 30 per cent or 48 per cent for wealthy individuals.

ICAC investigators said, of the money received through the Cascade Coal sale, $2.3 million went to Moses Obeid's wife Nicole for a Vaucluse home, almost $300,000 went to Eddie Obeid's lease of a new Mercedes, $407,000 was a deposit for a waterfront home in Judith Obeid's name that later fell through and more than $200,000 was paid as a deposit on a Port Macquarie unit.

Sassine admitted "concealing" the Obeid name in financial deals because "there has always been an issue with perception and family name was a hindrance to their carrying on business"- but denied acted as "a frontman" or that "two sets of books" were used.